NETWORK EFFECTS AND SYSTEMIC RISK IN THE BANKING SYSTEM
( Pp. 27-35)

The paper, based on an extended version of the model Nier et al, analyzes the mechanism of propagation of the financial contagion that causes systemic risk of instability of the banking system with a different organizational structure. Unlike the case of the spread of the financial contagion in the banking system with a uniform distribution of banks according to the degree (graph Erdos-Renyi), which was considered in most studies, including the work of the Nier et al, in the present study analyzed the proliferation contagion in banking systems with network structure, which more close to the real banking system. In particular, in an analysis of banking systems with a modular structure (model based on graph Watts-Strogatz, with a high coefficient of clustering and a small average path length) and a non-uniform distribution of banks by (a model based on graph Barabashi-Albert, scale-free network with the power distribution of banks by degree). Both models take into account such factors network path length, clustering coefficient and a nonuniform distribution of nodes in the degree observed in real bank networks and are not generated in the homogeneous model Erdos-Renyi.

Karaev A.K., Melnichuk M.V., (2016), NETWORK EFFECTS AND SYSTEMIC RISK IN THE BANKING SYSTEM. Business in Law, 4 => 27-35.

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financial stability, financial contagion, the network approach.